The Appeals Court has cleared the way for East African Development Bank (EADB) to auction property belonging to former cabinet secretary Raphael Tuju.
The regional bank is seeking to recover the $9.3 million loaned to Tuju in July 2015, which has since accumulated to $16.5 million (Sh2.22 billion).
Justices Kathurima M’Inoti, Imaana Laibuta and Mwaniki Gachoka on Thursday dismissed Tuju’s bid to block the lender from enforcing a judgment by a UK court dated 2019.
“Ultimately, we are satisfied that this appeal has no merit. Accordingly, this appeal is hereby dismissed with costs to the respondent [EADB],” the judges ruled.
The loan was meant to fund the construction of cottages on 20-acre Entim Sidai land in Karen, Nairobi, and the purchase of a 94-year-old Victorian bungalow that now operates as Dari Restaurant. But the construction of the houses fell behind schedule forcing EADB to seek recovery of Tuju’s assets.
The dispute was heard by a UK court, which ruled in favor of EADB but Tuju moved to the High Court in Kenya accusing the lender of failing to honor part of its financial pledge and frustrating his efforts to utilize the loans.
High Court Judge Wilfrida Okwany declined to quash the ruling of the UK court, prompting Tuju and his company Dari Limited to appeal against the judgement at the Appellate Court.
In his appeal, Tuju argued that EADB was frustrating the efforts of other lenders including KCB Group and equity investors to make the property profitable.
The Appeals Court noted that Tuju and EADB voluntarily chose to subject themselves to the laws of England, adding that the judgment cannot be overturned merely on the grounds that it was erroneous.
“It is therefore to be expected that before they make the choice of where their disputes will be resolved, they fully appreciate and understand the applicable law,” the judges said.
They further observed that complaining that the laws are oppressive after a judgment is an ‘illegitimate attempt to renegotiate’ the applicable law after the fact.
Following the ruling, Tuju and his family are set to lose the 20-acre prime property in Karen worth over Sh1.3 billion and the high-end Dari Restaurant, where a room for honeymooners goes for Sh43,000 a night.
Tuju has filed another pending case before the East African Court of Justice based in Arusha, Tanzania.
